The Behavior Gap
by Carl Richards
A financial planner's sketches and short chapters on the gap between investment returns and investor returns, caused by buying high, selling low and chasing. It is simple, visual and humane, and it reduces investing to the behaviors that matter.
Read it if…
you want the simplest possible explanation of why investors underperform their own investments.
Skip it if…
you want detail; the sketches are the point.
Three things you will actually use
- Your behavior costs more than fees.
- Ignore forecasts; plan.
- Simplicity is a defense.
Do this first
Look at your last three investment decisions and ask whether fear or greed drove them.
Our verdict
Simple and humane.
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